It was only 7 months ago that I had a 712 FICO score even though I had $70k in credit card debt and $65K in student loans. I never missed any payments even though I was maxxed out. By May of 2010, my payments and interest rates had gone up and I was having trouble. I worked with Citibank (my largest creditor at $40k) to close my account and give me a ZERO percent interest rate for 1 year in order to lower my payments and allow me to pay on my other accounts more aggressively. However, I didn't consolidate or do any sort of long term debt solution as I didn't want to completely destroy my credit.
This strategy has been working. However, it dropped my credit to 630. It looks like I will have the opportunity to pay off about $30K in credit card debt in 1 payment before the end of the year. I am wondering if I should apply that towards Citibank or pay off my other cards which are still active and open. What would you do? I need my score to go up the most it can. Please help.
I suspect that your agreement lowered your available revolving credit, which skyrocketed your utilization. I'd pay down / off the revolving credit (not the student loans) with priority put on the highest interest rates. You should see a good jump for each 10% of utilization you go down.